Hillenbrand Inc . (NYSE: NYSE:HI) reported its second quarter fiscal year 2024 earnings, indicating a challenging demand environment amidst global economic uncertainty. Despite a 14% increase in total revenue, largely due to the recent acquisition of Schenck Process Food and Performance Materials business, the company has not seen the expected rebound in order rates. Hillenbrand's Advanced Process Solutions (APS) segment showed strong aftermarket performance, particularly with polyolefin customers, but mid-sized capital project orders were lower than anticipated.
The Molding Technology Segment recorded a 10% sequential improvement in orders, yet the demand environment remains uncertain. The company is actively pursuing cost actions, including restructuring and cost controls, to mitigate these challenges. Hillenbrand provided an updated full-year revenue forecast of $3.2 billion to $3.3 billion, with adjusted EBITDA between $512 million and $536 million, and adjusted EPS of $3.30 to $3.50.
Key Takeaways
- Hillenbrand's total revenue grew by 14% despite a challenging demand environment.
- Order rates have not met expectations, with mid-sized capital project orders coming in lower than anticipated.
- Cost actions, including restructuring, are being implemented to manage the current demand landscape.
- Full-year revenue forecast is set at $3.2 billion to $3.3 billion, with adjusted EBITDA of $512 million to $536 million.
- Adjusted EPS is projected to be between $3.30 and $3.50 for the fiscal year.
- Hillenbrand plans to reach its deleverage target by the second quarter of fiscal 2025.
Company Outlook
- Hillenbrand has updated its full-year forecast, reflecting reduced demand trends.
- The company expects to achieve an adjusted EPS of $0.80 to $0.85 in Q3 2024.
- Long-term growth opportunities and margin expansion remain a focus for Hillenbrand.
Bearish Highlights
- Sustained order delays are impacting debt reduction efforts.
- The company faces unfavorable product mix, pricing pressure, and operating inefficiencies, particularly in its hot runner product line.
Bullish Highlights
- Strong aftermarket performance in the APS segment and solid demand from polyolefin customers.
- No cancellations on orders and growing pipelines indicate potential future revenue.
- Hillenbrand is optimistic about improved performance in the injection molding product line.
Misses
- The expected inflection point in demand has not been reached, leading to sustained uncertainty.
- Operating inefficiencies and lower-than-expected orders for mid-sized capital projects have been highlighted as areas of concern.
Q&A Highlights
- Hillenbrand emphasized its ability to flex capacity based on demand, crediting the Coperion team for developing this capability.
- The company's incremental margins in the APS business range from 35% to 40%.
- Free cash flow reductions are attributed to the timing of orders, yet improvements in trade working capital are expected.
- Hillenbrand anticipates a return to a 90% to 100% conversion rate for free cash flow in 2025, conditional on order time frames.
InvestingPro Insights
Hillenbrand Inc. (NYSE: HI) has demonstrated resilience in its financial performance, with a notable 14% growth in total revenue, as mentioned in the article. To add context to this performance, let's delve into some real-time data from InvestingPro and insights that could be crucial for investors.
InvestingPro Data for Hillenbrand shows a market capitalization of $2.91 billion, indicating a sizeable presence in its sector. The company's P/E ratio stands at 34.98, while the adjusted P/E ratio for the last twelve months as of Q1 2024 is slightly lower at 31.32. This suggests a valuation that considers near-term earnings potential. Additionally, the revenue growth for the same period was 22.39%, which is a robust figure that supports the company's reported revenue increase.
An InvestingPro Tip worth considering is that Hillenbrand has raised its dividend for 16 consecutive years, showcasing a strong commitment to returning value to shareholders even in uncertain economic times. This is further supported by the fact that the company has maintained dividend payments for 17 consecutive years, a testament to its financial stability and prudent management.
Another tip highlights that the stock has experienced a large price uptick over the last six months, with a 25.97% total return, which may catch the eye of growth-focused investors. This could be indicative of market confidence in the company's long-term strategy and operational efficiency.
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Full transcript - Hillenbrand Inc (HI) Q2 2024:
Operator: Greetings. Welcome to Hillenbrand's Second Quarter Fiscal Year 2024 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. At this time, I'll turn the conference over to Sam Mynsberge, Vice President of Investor Relations. Mr. Mynsberge, you may now begin your presentation.
Sam Mynsberge: Thank you, operator. Good morning, everyone. Welcome to Hillenbrand's Earnings Call for our second quarter of fiscal year 2024. I'm joined by our President and CEO, Kim Ryan; and our Senior Vice President and CFO, Bob VanHimbergen. I'd like to direct your attention to the supplemental slides posted on our IR website that we reference on today's call. Turning to Slide 3, I remind you that our comments may contain certain forward-looking statements that are subject to the Safe Harbor provisions of the securities laws. These statements are not guarantees of future performance and our actual results could differ materially. Also during the course of this call, we will be discussing certain non-GAAP operating performance measures, including organic comparisons for our segments, excluding the impact from acquisitions, divestitures and foreign currency exchange rates. Also, we will be discussing our results on a continuing operations basis which excludes the discontinued operations of Batesville which we divested in February of last year. I encourage you to review the appendix and Slide 3 of the presentation as well as our 10-Q which can be found on our website for a deeper discussion of non-GAAP information, forward-looking statements and the risk factors that could impact our actual results. With that, I'm going to turn the call over to Kim.
Kim Ryan: Thank you, Sam and good morning, everyone. Thanks for joining us on today's call. We continue to operate in a challenging demand environment as global macroeconomic uncertainty continues to impact customer order decisions across many parts of our business. We'll discuss this further in our updated outlook for the remainder of 2024 but first, I'll give a little more color on the dynamics we're seeing in our segments and the actions we're taking in response to the volume headwinds we're facing. Starting with the quarter, we had total revenue growth of 14%, driven by the acquisition of Schenck Process Food and Performance Materials business or FPM and we delivered adjusted earnings per share of $0.76 which was in line with our expectations. However, while order rates improved sequentially in both segments, they did not rebound to the levels we expected coming into the year. In our Advanced Process Solutions segment, we continue to see strong aftermarket performance and solid demand from our polyolefin customers, where the investment cycle has remained resilient and our technological capabilities allowing for the highest output and quality gives us a strong competitive advantage. However, this was offset by lower-than-expected orders for mid-sized capital projects in other end markets. Order pipelines remain robust and utilization of our test facilities remains high. However, final customer decisions continue to be slower than expected which is negatively impacting the segment's top line for the year. In response, we began implementing cost actions during the quarter, including targeted restructuring and strict limitations on hiring, travel and other discretionary costs. I'm pleased with the urgency in which the teams have been implementing these actions which continue to contribute to the 100 basis points of adjusted EBITDA margin expansion that we saw in the quarter. While we anticipate some of these costs will come back, we'll be disciplined until we see orders returning to expected levels. Additionally, we continue to make good progress leveraging the Hillenbrand operating model to integrate FPM and Linxis and we're pleased with the traction that we're getting on margin expansion in these businesses which is tracking ahead of schedule. We have seen a few larger projects get delayed to later in the fiscal year or early fiscal 2025 which put some pressure on near-term volumes. Nevertheless, we remain highly confident in the opportunities we see for these businesses to drive long-term growth and value for Hillenbrand. Turning to our Molding Technology Segment, we're pleased to see orders improve over 10% sequentially but we've yet to see a clear inflection point in the demand environment, as orders in the quarter were relatively consistent with what we experienced throughout last year. We remain cautiously optimistic that we've hit the trough but do not expect a material recovery in fiscal 2024 which is reflected in our updated guidance that Bob will cover in more detail later in the call. Additionally, we continue to see pressure in our short-cycle, high-margin hot runner products causing mix to be a headwind to our previously expected margin profile. As we announced last quarter, we've launched a restructuring program for the MTS segment. We've been working diligently on the execution of this program and increased its scope to include an additional facility consolidation which we executed in March. This is reflected in the $25 million charge we took this quarter which was higher than the $20 million charge we had previously announced. We also expect an increase in the annual run rate savings associated with the program to be approximately $20 million, up from our previous estimate of $15 million. We believe these actions are appropriate and necessary given the prolonged demand softness and we're confident that we'll be well-positioned to return to higher levels of growth and profitability once demand recovers. Since completing the strategic acquisitions that enabled our transformation, debt reduction has been our number 1 priority in terms of capital allocation. Sustained order delays have continued to negatively impact our cash flow and put pressure on our deleveraging time line in the near term but our priorities have not changed. We're confident that ongoing working capital optimization initiatives, together with the implemented cost controls, will drive stronger back half performance as we move forward. Across the enterprise, we've charged ourselves and our global teams to take the necessary actions to position the business for success. We remain energized by our portfolio transformation and believe the secular trends that underpin our key end markets will perform as anticipated over the long term and that our enhanced technological capabilities, engineering expertise and global reach will allow us to drive differentiated performance in these markets. With that, I'll now turn the call over to Bob to provide more detail on our financial performance and outlook.
Bob VanHimbergen: Thanks, Kim and good morning, everyone. Turning to our consolidated performance on Slide 5. We delivered revenue of $785 million, an increase of 14% compared to the prior year due to the acquisition of FPM. On an organic basis, revenues decreased 5% year-over-year as higher aftermarket revenue and pricing were more than offset by lower capital equipment volume, led by a decrease in MTS. Adjusted EBITDA of $123 million increased 13% but decreased 7% organically, as pricing, cost containment actions and product mix were more than offset by cost inflation and lower MTS volume. We delivered consolidated adjusted EBITDA margin of 15.6% which was essentially flat to the prior year. We reported GAAP net income of $6 million or $0.09 per share, down $0.24 from the prior year, as the impact of the FPM acquisition, lower tax expense, pricing and cost containment were more than offset by an increase in restructuring cost, cost inflation, lower organic volume and higher interest expense. Adjusted earnings per share of $0.76 increased $0.02 or 3%. Our adjusted effective tax rate in the quarter was 28.1% which was in line with our expectations. Our cash flow from operations was $3 million in the quarter, down approximately $47 million from the prior year and below our expectations, primarily due to the timing of working capital requirements on large projects and lower customer advances. We continue to deploy the Hillenbrand operating model to drive working capital efficiency around trade receivables, payables and inventory, where we saw an improvement as a percentage of sales of over 350 basis points year-over-year as well as sequential improvement. However, as a result of lower volumes and lower customer advances, we now expect our free cash flow for the full year to be in the range of $130 million to $150 million, versus our previous expectation of roughly $230 million. Now moving to segment performance, starting on APS on Slide 6. Revenue of $559 million increased 30% compared to the prior year, driven by FPM. Organic revenue was flat year-over-year as higher aftermarket volume and pricing were offset by lower capital equipment volume, particularly in midsized systems. Adjusted EBITDA of $101 million increased 38% year-over-year and was up 7% organically, primarily driven by favorable price cost and cost containment, partially offset by lower capital equipment volume. We delivered adjusted EBITDA margin in the quarter of 18% which was up 100 basis points over the prior year, primarily due to cost containment, favorable product mix and progress on integration initiatives. Backlog of $1.9 billion increased 12% compared to the prior year, driven by FPM. On an organic basis, backlog decreased 5%. Sequentially, backlog was down 2% but was flat excluding foreign exchange. Now turning to MTS on Slide 7. Revenue of $226 million, decreased 13% year-over-year, primarily driven by lower volume for injection molding equipment. While injection molding faced a tough comparable against the prior year, the revenue performance exceeded our expectations for the quarter as the teams did a good job accelerating project execution from backlog but this was largely offset by softer-than-expected performance in our hot runner product line, largely due to softer demand in North America. Adjusted EBITDA of $34 million decreased 29% due to lower volume and cost inflation, partially offset by cost containment. Adjusted EBITDA margin of 14.9%, decreased 330 basis points compared to the prior year, largely driven by the impact of lower volumes on operating leverage and price cost pressure. In addition, we've identified isolated operating efficiencies in 1 of our hot runner facilities in North America. We've aggressively pursued cost actions during the quarter to help support back half profitability given these challenges. Backlog of $230 million decreased 22% compared to the prior year but was essentially flat on a sequential basis. As Kim mentioned, orders improved sequentially but did not fully recover the shortfall we experienced in Q1. We saw bright spots of demand for injection molding equipment, particularly for automotive and packaging applications but weakness in consumer goods and electronics weighed on our higher-margin hot runner product line, particularly in North America, as I mentioned. Turning to Slide 8. Net debt at the end of the second quarter was $1.88 billion and net debt-to-adjusted EBITDA ratio was 3.5x. As net debt reduction remains our number 1 priority, we're disappointed with the modest increase in our leverage which was slightly above our expectations due to the weaker cash flow and orders. Given these conditions, it will be a challenge to achieve our deleverage target of returning to within our net leverage guardrails of 1.7x to 2.7x by our previously stated goal of second quarter fiscal 2025. We'll continue to aggressively pursue cost actions and working capital efficiencies but further reduce leverage but we'll have to revisit the time line for turning to our guardrails once we have more visibility to order patterns normalizing. I'll now wrap up with our revised outlook for the remainder of 2024. As mentioned, order patterns in the quarter remained below our original expectations. We've yet to see material shift in underlying market conditions. And consequently, we are updating our outlook to reflect current demand trends. For full year 2024, we now expect total revenue for Hillenbrand of $3.2 billion to $3.3 billion, previously $3.3 billion to $3.4 billion. Adjusted EBITDA is now expected to be in the range of $512 million to $536 million, previously $530 million to $588 million. Adjusted EPS is now expected to be $3.30 to $3.50, previously $3.60 to $3.95. For APS, the changes reflect lower volumes due to order timing and the impact of fixed cost leverage, partially offset by cost actions and accelerated margin performance within the recent acquisitions. In MTS, we're seeing unfavorable product mix, pricing pressure and isolated operating inefficiencies within our hot runner product line, partially offset by roughly $8 million of in-year MTS restructuring benefits. We're seeing better performance in our injection molding product line compared to our original expectations, given some larger orders that came through in Q2 but as a reminder, this comes in at a lower relative margin. Our higher-margin hot runner product line remains softer than expected, particularly in North America. And as I mentioned, we're experiencing operating inefficiencies in 1 of our hot running facilities which is putting additional pressure on margins. Through our restructuring and capacity optimization efforts, we're actively working to return to expected levels of efficiency which we expect to start seeing in the fourth quarter. For Q3, we are targeting adjusted earnings per share in the range of $0.80 to $0.85, reflecting moderately improved performance in both segments on a sequential basis. Please review Slide 9 for additional guidance assumptions. In summary, we recognize the headwinds we're facing and we're taking actions to enable the business to navigate this challenging environment. We will remain vigilant and pursue additional actions as necessary. At the same time, we remain excited about the opportunities for growth and margin expansion we see for the businesses over the long term. With that, I'll turn the call back over to Kim.
Kim Ryan: Thanks, Bob. Before taking questions, I'll end our presentation this morning with a few final remarks. We acknowledge that orders continue to be softer and more cyclical throughout various parts of our business as headwinds have persisted beyond our initial expectations. As Bob discussed, our revised guidance range reflects the current market conditions and the expected trajectory of the businesses throughout the rest of the year. I have strong conviction that our internal initiatives and diligent execution will navigate us through the near term and that our strong brands and process technologies remain best-in-class in their ability to solve our customers' most complex processing needs anywhere in the world. Finally, as we announced a few weeks ago, we'll be featuring a number of our brands at next week's plastics trade show, NPE, in Orlando, Florida. As one of the largest plastics trade shows in the world, this is a great opportunity for us to engage with customers and highlight the breadth of our capabilities and key innovations in supporting the critical elements of the plastics value chain, from pellet production to manufactured products to recycling. We'll be a leading member of the education sessions featuring industry experts within our business as well as hosting the annual circular plastics challenge again this year in partnership with Net Impact and Coca-Cola (NYSE:KO), where teams from all around the world come together to promote innovation within the plastics industry focused on sustainability and the circular economy. With that, we'll now open the line for your questions.
Operator: [Operator Instructions] Our first question today is from the line of Matt Summerville with D.A. Davidson.
Matt Summerville: Just maybe you mentioned -- can you talk a little bit about the quarter-on-quarter sequential order improvement you've seen across both segments. What markets and geographies are driving that? And what you've seen thus far in April, does that indicate at least some level of sustainability?
Kim Ryan: Well, first of all, good morning, Matt. Bob and I both kind of hammer like this question a bit. So on the APS side, we saw orders in those larger projects. And so while those were some of the things we were waiting on, we did start seeing some of those break in the last quarter. And what I would say to that is that we were pleased with kind of obtaining more than what I would say is our fair share of those order decisions as they came to pass. So we were pleased with that. As you know, there is still a robust order pipeline on those large projects that is anticipated to come over the next several quarters. The place where we have continued to see some of the delays in decision-making is kind of those midsized projects, whether that's compounding lines or whether that is some of the larger food lines that we've been betting on. Some of those are even some of the ones that we are going to market, for instance, as a consolidated portfolio in our systems offering for the first time as we're building our pipeline for that. So those are some of the places where we've seen a little bit of slowness. The quick cycle business, like the service business, has continued to see great performance, good strength, kind of on a global basis across all of the brands and we have recently announced that the service organization is, for the new food acquisitions, also going to become a part of the service organization of APS. And so we're really looking forward to the traction that we'll gain there, having them be a part of the entire service structure of the business, so that we can begin to focus our efforts there on the expansion that we talked about from a synergy standpoint. On the MTS side, what we saw was a bit of recovery, specifically in North America, in the automotive area, in the injection molding. And so we were pleased to see that. They have been in a period over the last 6 or so quarters where they've been at this low. This is our highest order intake on the injection molding side of the business in 7 quarters. So we were pleased with that. And hopefully, we've seen the trough and are starting to come out of that a bit. On the hot runner side, we continue to see some softness and that is China and North America market for us primarily. We have footprint in India. We service the European geographies. Those aren't the largest part of the market though. So our market in the hot runner space is dictated by primarily the China market and the U.S. market. We have a decently sized footprint in consumer goods which is not an area that has recovered yet on the hot runner side. So we continue to monitor that on the hot runner side. But again, on the injection molding side, we've seen some nice pickups in some of the markets that are relevant for us and anticipate, at least, as we talk to our businesses, the outlook continues to be, I would say, optimistic in those areas as they begin to see some upticks. Bob, anything else that I did not handle?
Bob VanHimbergen: No, I think you covered everything.
Kim Ryan: Is that all that you mentioned?
Matt Summerville: Yes, no, absolutely. Thank you, Kim. With respect to the commentary regarding the incremental price pressure you've seen in MTS. I'm curious, as you've gone back and -- realizing you acquired this in late calendar '19, so I understand that. But as you've gone back and I'm sure, studied past cycles, is that typical customer behavior in the latter stages of a downturn in that business? And then if you could also maybe delineate a little bit the takedown you had in the MTS EBITDA margin guide. Can you maybe parse that out a little bit between how much of that is adverse moves in price cost versus the inefficiency issues that I believe Bob touched on.
Bob VanHimbergen: Sure, yes. So Matt, your first question, it is typical when there is a downturn that there's this pricing pressure. It's a little bit different now versus the last cycle, just because China isn't growing at the levels it was, call it, 6 or 7 years ago. But it is typical to have pricing pressure during these cycles. And as far as the margins, really the pricing pressure is probably, you call it, pricing is probably 1/3 of the margin decline, unfavorable mix from what we thought is probably 1/3 as well and then the manufacturing efficiencies probably 1/3. And again, the restructuring, we expect to clean that up and so we'll get out of that in Q4, as I mentioned.
Operator: [Operator Instructions] Our next questions are from the line of Daniel Moore with CJS Securities.
Daniel Moore: Kim and Bob, appreciate the color. Forgive me if this is a rehash of Matt's first question to some extent. But just looking at the midsized equipment projects in APS. It sounds like you're seeing delays. Are you seeing any order cancellations at this stage? And what are you hearing from your customers in terms of what they need to turn the investments to get back on? Is it lower interest rates? Is it geopolitical stability? Like what is it that's the key holdup?
Kim Ryan: So what we're hearing on those mid-sized projects, one of the things that I think is going to be exciting around this is that those midsized projects, they typically follow where we've had large pellet projects. So as capacity is coming online, then that capacity has to go somewhere. And typically, these midsized projects are compounding lines and things like that. Now, in certain geographies, China as an example which has been a large investment area for us, that wasn't a big compounding footprint for us historically. However, what we are seeing that is encouraging from our point of view is that as these formulations and the requirements for these products, the output requirements are increasing, the quality requirements are increasing and that moves towards what we do. And so there are some opportunities that we see in these markets where we've been putting a lot of capital investments in on the large projects, where we think a lot of these relationships will continue to foster themselves into new opportunities for us to get into that midsized project space because of the increasing complexity of demand. And so that's kind of an exciting opportunity for us. From that point of view, I would say that we feel pretty bullish about some of the opportunities that will be coming down the road. What expectations are there? I think we have to continue to see a leveling out in consumer demand. I think we have to continue to make sure that these plants are coming online, the plants we've been working on for a number of years now in certain geographies. As those come online, the investments for the next step of the process will break free and come online. Remember, the cycle times for those jobs are significantly shorter than the, call it, 4 years that you might see for one of those really large project investments between the time that the project is conceived and the time that the plant is commissioned. So that's kind of what we're looking at. And in the meantime, we're continuing to build our service business with our large implementations and continue to focus on that on a global basis.
Bob VanHimbergen: Yes. And then, Dan, just to be specific to your question, we've had no cancellations on orders and no cancellations in our pipelines. Our pipelines are built on active discussions and those continue to grow. And I think interest rate certainly is a factor. And as those start to maybe decline, I think we'll get some of these unlocked.
Daniel Moore: That's helpful. Appreciate it. Any just more color on the incremental restructuring efforts, where specifically the cost saves are coming from? And how do we think about kind of incremental margins when volume eventually starts to recover? Is there kind of a shorter or medium-term benefit in terms of the incrementals following the -- not just the incremental $5 million but the overall restructuring program?
Bob VanHimbergen: Yes. So we did announce, obviously, in our last quarter call, we expected to take a charge of about $20 million in Q2. We did bring that up a bit to about $25 million and then we, therefore, increased our savings expectations from $15 million to now $20 million. Now that's going to be about $8 million of benefit coming in 2024 with the full expected run rate to come in 2025. As far as APS, you did see in our prepared remarks, we are taking some smaller targeted charges, particularly in North America and that's really just to adjust for some of the near-term order pressure in some of those product lines that we highlight. So the small and midterm projects.
Kim Ryan: And one thing, Dan. I know we've talked about this before but I'll just kind of embrace this again. Remember, when we started expanding significantly the order levels in APS, we began to develop partners. So we have a certain amount of that capacity that we execute inside and a certain amount of that capacity that we have developed partners outside the business. So if you look at the nearly doubling of that business over the last 5 or 6 years, the footprint of employees have not doubled in response to that. And what that does is it gives us a certain ability to flex when demand goes up or down. And what you've seen over the last quarter, the last couple of quarters, we were flexing down and were able to do that without a lot of incremental costs. And then we will be able to flex back up as orders come in. So for instance, we saw a number of orders come in, in those large projects. So now we're back at a point where we need that flex capacity that, for instance, we had taken offline over the couple of quarters before that. But that took us a number of years to develop and so I'll give a lot of credit to Ulrich Bartel and his team on the Coperion side at anticipating this and developing those partners over a number of years. It's a muscle that we're working to build all over the company but it's been a great tool for us now. And so we're using that right now as we're trying to get these new projects that have been signed in the last quarter up and running again, while we've still got pieces of the business that are kind of waiting on a bit of the order pipeline flow through.
Bob VanHimbergen: Yes. And because of that flexibility, Dan, your question on incrementals and APS, that's generally in that 35% to 40% range. And because of that flex, that's how we're able to maintain that flow through.
Daniel Moore: Got it. Last one for me, I'll jump back in queue. Obviously, as you called out, free cash flow is softer than -- and the revision free cash flow, certainly, higher than the change in the EBITDA guide. Just kind of walk us through the biggest buckets impacting free cash this year? And how long would you anticipate it likely take to get back to the more typical 90% to 100% conversion rate that you target?
Bob VanHimbergen: Yes. So the reductions, probably half earnings and half advances, are related to timing of orders, Dan. Now I'd say that's partially offset by the trade working capital improvement actions that we've been focused on. And so we continue to focus on the fundamentals around improving our trade AR, trade AP and inventory. And so as I mentioned, we did see some good improvement in those areas over the last year. And I'd expect to see continued trade working capital improvement as a percent of sales here moving forward. And that's both on the acquisitions but also even on the legacy businesses. And so as those orders finally get released, again, you saw some of the large orders get released in Q2. And I think as we get into '25, I think we'll be back to that 90% to 100% range pending that order time frame. But in the meantime, we're going to be focused on the fundamentals that we can control.
Operator: At this time, we've reached the end of the question-and-answer session. I'll turn the call over to Kim Ryan for closing remarks.
Kim Ryan: Thanks again for joining us on the call today. We appreciate your ownership and your interest in Hillenbrand. We look forward to talking to you again in August when we report our fiscal third quarter results and wish you all a great week and a great day. Thank you.
Operator: This will conclude today's conference. You may disconnect your lines at this time. We thank you for your participation and have a wonderful day.
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